November 21, 2015

Maintain ‘buy’ on Apollo Tyres, target Rs 240: Kotak

Apollo Tyres announced the acquisition of 100% stake in Germany based tyre retailer, Reifencom, for 45.6 million euro (at 0.3X FY2014 revenues). Reifencom is a profitable and zero-debt entity, operating 37 retail stores and an online portal, accounting for ~4% market share in the replacement segment of Germany’s passenger car tyre market.

The acquisition will provide better market access to Apollo’s European operations and its ‘Apollo’ branded tyres, in our view.We continue to remain positive on the growth prospects of Apollo’s European operations, expecting it to significantly scale-up its presence in the next 3-5 years.